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    Popular Vehicles

    PVSL
    Automobile and Auto Components·11 Feb 2026
    Management Summary

    Popular Vehicles reported a strong Q3 FY26, with significant revenue and EBITDA growth driven by robust new vehicle volumes across PV and CV segments, benefiting from GST reforms and improved customer sentiment. However, gross profit margins saw a decline due to a shift in product mix towards lower-margin vehicles and a temporary dip in service volumes. The company is strategically expanding its OEM partnerships and digital presence, while managing inventory effectively and guiding for a return to FY24 PAT levels and 5% EBITDA margins by FY27.

    Highlights

    5

    • Total income for Q3 FY26 grew 30.9% YoY to ₹1,791.8 crores from ₹1,368.6 crores in Q3 FY25, indicating strong demand recovery.

    • EBITDA for Q3 FY26 increased 68.5% YoY to ₹58.2 crores from ₹34.6 crores in Q3 FY25, with margins at 3.3%, reflecting improved operating leverage.

    • New vehicle volumes for Q3 FY26 increased 44% YoY to 16,023 units, driven by robust growth in entry-level PV (35%+ YoY) and CV (52%+ YoY) segments following GST reforms.

    • New vehicle inventory reduced significantly to 19 days, and overall inventory to 21 days, supporting lower discounting and improved working capital management.

    • Strategic expansion with the addition of an Audi dealership, BKT distributorship, and the launch of ZPAREX e-commerce platform diversifies revenue streams and strengthens omnichannel presence.

    Concerns

    4

    • Service business topline increased marginally by 1% YoY, with service volumes down 19% YoY in Q3 FY26, partly due to a strategic reduction in low-value campaigns.

    • Gross Profit margin declined to 12.7% in Q3 FY26 from historical 14.5%-15% levels, attributed to a shift in product mix towards lower-margin smaller vehicles and commercial vehicles.

    • Nine-month FY26 PAT was a loss of ₹7.5 crores, compared to a profit of ₹3.3 crores in 9M FY25, impacted by acquisition-linked depreciation and new Labor Code costs.

    • Maruti supply shortages for certain models in Jan-Feb 2026 led to lost sales, indicating demand outstripping supply for popular segments.

    Key financials

    Metrics

    8

    Periods

    2

    Q3 FY26

    4
    • Total Income
      ₹1,791.8 Cr
      YoY+30.9%QoQ+16.8%
    • EBITDA
      ₹58.2 Cr
      YoY+68.5%QoQ+17.8%
    • EBITDA Margin
      3.3%
    • PAT
      ₹0.7 Cr

    9M FY26

    4
    • Total Income
      ₹4,642.3 Cr
      YoY+10.9%
    • EBITDA
      ₹145.9 Cr
      YoY+0.2%
    • EBITDA Margin
      3.1%
    • PAT
      ₹-7.5 Cr

    Segment breakdown

    • Passenger Vehicles₹749 Cr54.0%
    • Commercial Vehicles₹604 Cr43.5%
    • EV₹34 Cr2.5%
    Donut· Share of Total Income (Q3 FY26)

    Capital allocation

    4
    high confidence
    CategoryHeadline
    Debt

    Gross ₹655 crores

    M&A

    Audi Dealership (Telangana & Andhra Pradesh)

    acquisition · closed

    M&A

    Balkrishna Industries Limited (BKT) Distributorship

    acquisition · signed

    M&A

    ZPAREX Digisolutions Private Limited

    acquisition · announced

    Guidance & targets

    17
    CategoryTargetPriority
    Profitability
    EBITDA margin
    5% range
    		High
    Profitability
    PAT
    approaching FY24 levels (₹76 crores)
    		High
    Profitability
    EBITDA (overall)
    3.5%
    		High
    Profitability
    PAT
    positive
    		High
    Profitability
    PAT
    positive
    		High
    Profitability
    Gross Profit margin
    13%+, then 14%-15%
    		Medium
    Revenue
    Topline growth
    high double-digit
    		High
    Service
    Service ASP increase
    8%-10%
    		High
    Service
    Service volume growth
    7%-8%
    		High
    Growth
    Overall growth
    mid-teens
    		High
    Inventory
    Working capital debt
    ₹550 crores
    		High
    New Business
    ZPAREX business kick-off
    Q1 FY27
    		High
    Operational Efficiency
    Back office centralization completion
    April or May (early Q1 FY27)
    		High
    Volume
    Acquisition-led volume growth
    9,000 odd vehicles
    		High
    Volume
    Total vehicles sold
    45,000 vehicles
    		High
    Volume
    Overall volume growth
    20%
    		High
    EV Penetration
    4-wheeler EV penetration (Government guideline)
    30%
    		High

    Service business volume growth

    FY27 onwards
    Currentdown 19% YoY in Q3 FY26
    Targetdouble-digit growth from FY27, 7-8% volume growth

    Why it matters

    To confirm the recovery and contribution from the high-margin service segment after strategic adjustments.

    By end of FY '26, we would look at a flat over FY '25. But FY '27, we should see an increase of about 10%-12%, including whatever the acquisitions that have already been done, which is in Telangana and Punjab.

    How to verify

    key_financials.segment_breakdown[name='Passenger Vehicles'].metrics[label='Service volume']

    Risks & concerns

    6
    RiskSeverity

    Temporary impact on luxury car volumes due to cyberattack

    Luxury car volumes (JLR) were temporarily impacted due to a cyberattack at one OEM partner, though the issue has been fully resolved with pickup expected from Q4. — Management acknowledged

    low

    Softness and volume degrowth in service business

    Service topline increased marginally by 1% YoY, but service volumes were down 19% YoY in Q3 FY26, partly due to the lag effect of lower new vehicle sales and a strategic reduction in low-value campaigns. — Management acknowledged

    medium

    Gross Profit margin compression due to product mix shift

    GP margin declined to 12.7% in Q3 FY26 from historical 14.5%-15% levels, attributed to increased sales of lower-margin smaller vehicles, commercial vehicles, and Ather, as well as acquisition-related margin erosion. — Management acknowledged

    high

    Near-term pressure on margins from acquisitions and organic network expansion

    The acquisitions completed during 9M FY26, along with ongoing organic network expansion, will have a near-term impact on cost structure and may exert some pressure on margins, with full revenue benefits expected from FY27. — Management acknowledged

    medium

    Standalone loss due to acquisition-linked depreciation and new Labor Code

    The standalone loss for PVSL was primarily due to the IndAS and depreciation impact of approximately ₹8 crores from the Telangana acquisition and ₹1.6 crores due to the new Labor Code. — Management acknowledged

    medium

    Maruti supply shortage impacting sales

    Popular Vehicles experienced lost sales in January and February due to non-availability of vehicles from Maruti, as demand for certain models (e.g., S-presso, Baleno, Fronx) outstripped supply. — Management acknowledged

    medium

    Q&A highlights

    8

    “So to start on the debt position that we are looking at, the approximate debt that we have in the balance sheet at this point of time is close to around, total borrowings being around Rs. 655 crores. ... The inventory levels that we are really looking at is close to around 21 days in terms of the inventory, and that is the total inventory across the organization, while the new vehicle's inventory has come down to close to around 18-19 days.”

    Clarifies the current debt position and significant reduction in inventory days, which impacts working capital and interest costs.

    asked by Preet Pitani

    2 min read6 chapters

    Detailed Narrative

    01

    Q3 FY26 Performance Highlights and Demand Recovery

    Popular Vehicles reported Q3 FY26 as its strongest performing quarter in 1.5 years, with total income growing 30.9% YoY to ₹1,791.8 crores. This was driven by a 44% YoY increase in new vehicle volumes to 16,023 units, benefiting from improved customer sentiment post-GST reforms. Entry-level passenger vehicle volumes surged over 35% YoY, and the commercial vehicle segment saw volumes grow over 52% YoY, indicating a broad-based demand recovery.

    02

    Strategic Expansion and Diversification

    The company continued its strategic diversification by acquiring an Audi dealership in Telangana and Andhra Pradesh, marking a new OEM relationship. It also entered an agreement to distribute Balkrishna Industries Limited (BKT) products in Kerala and Karnataka, expanding its spare parts business. Furthermore, Popular Vehicles established ZPAREX Digisolutions Private Limited, an e-commerce platform for spare parts and accessories, which is expected to kick off business in Q1 FY27.

    03

    Margin Dynamics and Profitability Outlook

    EBITDA for Q3 FY26 increased 68.5% YoY to ₹58.2 crores, with margins at 3.3%. However, gross profit margins declined to 12.7% from historical 14.5%-15% levels, primarily due to a shift in product mix towards lower-margin smaller vehicles, commercial vehicles, and Ather EVs. Management guided for EBITDA margins to normalize towards a 5% range and PAT to approach FY24 levels (₹76 crores) by FY27, with Q4 FY26 and FY27 expected to be PAT positive.

    04

    Inventory Management and Debt Position

    Popular Vehicles demonstrated improved inventory management, with new vehicle inventory reduced to 19 days and overall inventory to 21 days. This reduction is expected to lead to lower discounting and reduced interest costs in future quarters. Total borrowings stood at approximately ₹655 crores, including ₹80 crores in term loans for acquisitions, with working capital debt expected to remain around ₹550 crores by March 2026, similar to FY25 levels.

    05

    Service Business Evolution

    The service business experienced some softness, with topline marginally up 1% YoY and volumes down 19% YoY in Q3 FY26. This was attributed to the lag effect of lower new vehicle sales in prior periods and a strategic decision to reduce low-value campaigns. Despite this, the average selling price (ASP) for service increased by 17%-18% YoY in Q3. Management expects double-digit service volume growth and an 8%-10% ASP increase from FY27, driven by recent acquisitions and organic growth.

    06

    Operational Efficiency Initiatives and EV Readiness

    The company is implementing operational efficiency initiatives, including centralizing its back office, which is expected to be completed by early Q1 FY27, aiming for annualized savings of approximately ₹1.5 crore. Regarding EV transition, Popular Vehicles highlighted its experience servicing Ather EVs (4,000 vehicles/month) and confirmed that all service centers and most Nexa showrooms are equipped with charging infrastructure, positioning it for the government's target of 30% EV penetration by 2030.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.